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Pay-as-you-go Car Finance

What is Pay-as-you-go Car Finance?

2020 Vauxhall Corsa-e

Stoneacre’s Pay-as-you-go Car Finance is designed for customers who struggle to obtain finance through mainstream lenders. This innovative, pay-as-you-drive option is also known as a black box car finance agreement.

Pay-as-you-go is built around the traditional Hire Purchase (HP) agreement, which requires an initial deposit plus a set schedule of recurring monthly payments. The car remains the property of the lender and ownership only transfers when all the payments have been made.

What makes this option a bit different to HP Finance is the inclusion of a small black box within the car. This is similar to the kind of black box that is fitted by insurance companies. However, rather than monitoring a driver's behaviour, it acts as a hi-tech repayment reminder.


Representative Example

Cash Price£16,551.73
Deposit£1,578.78
Term49 months
Payment£367.83
Amount of credit£14,972.95
Fixed Interest4.99%
Representative APR10.62%
Total Charge for credit£3,449.86
Option fee (included in total charge for credit)£399.00
Total Amount Payable (Incl. Deposit)£20,001.59

We are a credit broker and a lender. We can introduce you to a limited number of lenders and their finance products. We will provide details of products available, but no advice or recommendation will be made. You must decide whether the finance product is right for you. We do not charge you a fee for our services. Lenders may pay commission to us (either a fixed fee or a fixed percentage of the amount you borrow) for introducing you to them, this may be calculated in reference to a variable factor such as (but not limited to) the vehicle age, your credit score and the amount you are borrowing. Different lenders may pay different commissions for such introductions.

Black Box in Cars

Black box car finance is a very effective type of financing. A black box is fitted by a qualified technician to be discreetly located under the dashboard or in a glove box. Once installed, the box connects into your car's internal computer via the EOBD port and communicates with a lender using GPRS functionality.


The only time you’ll ever notice this remote communication is three days before your monthly payment is due. The box’s green light turns red and flashes. The lender might also send you an SMS reminder. Once a payment has been made, you’ll receive an activation code. This can be keyed into the box to stop the light and flashing and the light will return green for the rest of the month.


Come the end of your Pay-as-you-go car finance agreement, the black box is removed and ownership of the car is transferred to you, this is providing all payments have been made. Alternatively, some lenders allow you to purchase the box and keep it fitted as a permanent immobiliser.

Pay-as-you-go Car Finance for Bad Credit

Pay-as-you-go car finance with bad credit is certainly possible. Even with bad credit, driving away with your dream car is not out of the question. This is why PAYG car finance is designed for drivers struggling to receive finance. You have already heard about the pay-as-you-go car finance box. It is installed into the car to track driving behaviours and patterns. In turn, this reduces car finance costs for you. It is a very viable option for people with bad credit scores and it also gives more confidence to the lenders who are providing the financing deals.

Pay-as-you-go Car Insurance

Why do lenders use the black box?

Black boxes installed in cars have have been proven to reduce car finance payment default rates by up to 500%. This gives lenders the reassurance to provide car finance for customers who may have previously been considered too high-risk.

Using Pay-as-you-go car finance and paying on time also helps customers build up a repayment record that contributes to an overall improved credit rating. Eventually, this could open the door to mainstream lenders and lower the finance rates.

What happens if I fail to make a car repayment on time?

Should you miss a repayment, the activation code won't be issued and you’ll be unable to drive the car. However, most lenders allow a 30 day grace period which lets you keep the car running while you sort the payment out.

If your payment still hasn’t been made after this period, the GPRS unit will remotely deactivate your car. Essentially, you won't drive if you can't pay. This is why the option is known as Pay-as-you-go car finance.

Black Box Car Insurance Pros & Cons

  • Pay as you go insurance is designed to help those that otherwise would be rejected for car finance
  • You can improve your credit rating by repaying the finance each month, on time
  • You can lower your monthly payments with careful and responsible driving
  • If you fail to make payments on time, the car can be temporarily disabled until you make the payment
  • The black box will only be removed once the payments are made in full
  • Higher loan rates may occur because the borrowers here are high-risk
  • Black Box Car Insurance Pros
    • Pay as you go insurance is designed to help those that otherwise would be rejected for car finance
    • You can improve your credit rating by repaying the finance each month, on time
    • You can lower your monthly payments with careful and responsible driving
  • Black Box Car Insurance Cons
    • If you fail to make payments on time, the car can be temporarily disabled until you make the payment
    • The black box will only be removed once the payments are made in full
    • Higher loan rates may occur because the borrowers here are high-risk

Black Box FAQs

  • Can you have the black box removed?

    No. The car remains the property of the lender until all the payments have been made, at which point the black box is removed and ownership transferred to you, but some lenders let you buy the box and keep it fitted as permanent immobiliser. 

  • Can you pay a weekly amount with a black box?

    Although some lenders offer Pay-as-you-go car finance with weekly payments, most insist on a single monthly payment as this is usually easier for both parties to manage. 

  • Will the car be disabled while in use?

    Understandably, the question of when and where the car might be disabled is one of the biggest concerns. To keep all road users safe, the car can only be disabled after being left idle. Before this, the black box will issue a warning sound and the red light will flash. Some lenders also send an SMS warning before the time.

  • Is a black box a good idea?

    A black box car finance agreement can certainly be right for you if you're looking for finance that otherwise can't be obtained. It's more affordable because of the fitted black box that records your driving information.

  • How long does a black box have to stay in your car?

    It depends on the individual insurance policies - however, a black box usually stays installed throughout the duration of your insurance. For example, if you take out a PAYG insurance agreement for the year then the black box will also stay present for that time.

Pay-as-you-go Car Finance Near Me

Discover Pay-as-you-go car finance dealers with Stoneacre. Locate your nearest branch by entering your postcode or take a look and see all of the available nationwide dealerships for pay-as-you-go finance. We’re established pay-as-you-go car finance dealers, so finding the right deal for you will be simple and hassle-free.

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